Autoblog

REPORT: Dollar Thrifty to cut percentage of Chrysler products from as much as 76% to 30%

Jonathon Ramsey — Wed, 14 Oct 2009 08:58:00 EST

Filed under: Car Buying, Earnings/Financials

Dollar Thrifty Automotive Group, known in the retail world as Dollar Rent A Car and Thrifty Car Rental, will be buying about 40,000 fewer Chryslers than it did last year. Previously, the company was contractually bound to ensure that 75% of its fleet was composed of Chrysler vehicles. After the bankruptcy kerfuffle, the contract has been revised to compel Dollar Thrifty to purchase a new minimum number of vehicles, and the company is using the freedom to increase its model mix.

Instead of being so Pentastar-heavy, from now on, Reuters says that Dollar Thrifty's fleet figures to be 30% Chrysler, 34% Ford, 20% General Motors, 6% Nissan, and 10% left over for Hyundai and Kia. The model mix transition should also help Dollar Thrifty stabilize the income from fleet sales; the company took a beating when the residuals market took a dump, especially due to the fact that it was trying to flog so many products from a company thought to have a dubious future.

All three domestics have talked about getting away from low-margin fleet buyers for some time now. Still, the 40,000 hit to Chrysler's sales still probably isn't the best of news - Chrysler didn't want to get this far away from fleets.

[Source: Reuters]

REPORT: Dollar Thrifty to cut percentage of Chrysler products from as much as 76% to 30% originally appeared on Autoblog on Wed, 14 Oct 2009 08:58:00 EST. Please see our terms for use of feeds.

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Hyundai and Kia seen using fleets to boost sales numbers

Michael Harley — Mon, 13 Apr 2009 16:30:00 EST

Filed under: Car Buying, Plants/Manufacturing, Hyundai, Kia, Earnings/Financials

While most automakers are reporting double-digit drops in sales each month, Hyundai and Kia continue to swim against the current and maintain (or even increase) units sold. According to Automotive News, a significant part of their success is attributable to fleet sales - large numbers of cars going directly into rental and corporate fleets. During the first quarter of 2009 alone, more than 33 percent of Hyundai's first quarter sales of 95,854 units were fleet related. Rental car sales represented nearly 35 percent of Kia's sales during the same period.

There is nothing inherently wrong with fleet sales, but many in the industry see them as a historically-abused method to inflate numbers, an inaccurate reflection of actual showroom traffic, and a potential liability for residual values. "We accept the criticism that our fleet is up," Hyundai Motor America's sales boss Dave Zuchowski said when he addressed the issue. "But our retail share also is up and outperformed the industry."

Utilized heavily by the Detroit Three in the past, fleet sales are a double-edged sword. Automakers get a strong boost in sales when the vehicles are delivered, but then pay heavy consequences with an oversaturated segment when the cars are dumped back into the used car market. It will be interesting to see how the Korean sister brands will address this repercussion in the near future.

[Source: Automotive News - subs. req'd]

Hyundai and Kia seen using fleets to boost sales numbers originally appeared on Autoblog on Mon, 13 Apr 2009 16:30:00 EST. Please see our terms for use of feeds.

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Rental fleet sales down last year, 2009 will be worse

Jonathon Ramsey — Sat, 10 Jan 2009 14:00:00 EST

Filed under: Trends, Chrysler, Ford, GM, Earnings/Financials

Last summer, it was the Detroit Three that were restraining themselves from dumping cars into the gaping maw of fleet sales just to boost the bottom line. Turns out they had some help with that discipline: Due to last year's events, rental car fleets shrunk by 400,000 units from 2007 to 2008. As we begin 2009, rental car companies have declared they will be trimming their fleet orders and curbing the number of vehicles they keep on hand even further.

Rental car companies have been thrown under a number of buses as of late. They can't borrow money to finance purchases; the recession has hammered the travel industry; wholesale used vehicle prices are falling (making rental car fleets less valuable); and besides that, car dealers can't get the money to buy the retired rental cars anyway, which subtracts yet another revenue stream.

Rental companies have been good for something like 15% of sales from General Motors, Ford, and Chrysler. But not this year: Enterprise, which also buys for National and Alamo, will buy half the number of cars it did last year, and they'll keep those cars a couple of months longer. Hertz, Dollar, and Thrifty also said they will buy fewer cars and work them longer. The automakers have doubled incentives to encourage sales, but there are simply no teeth left in the rental business with which to bite.

Thus, don't be surprised to find a few more stains on the seats and a few more miles on the clock the next time you find yourself at the wheel of a rental car.

[Source: Automotive News, Sub Req.]

Rental fleet sales down last year, 2009 will be worse originally appeared on Autoblog on Sat, 10 Jan 2009 14:00:00 EST. Please see our terms for use of feeds.

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Detroit 3 show restraint in tough times, continue to limit fleet sales

Michael Harley — Mon, 16 Jun 2008 15:30:00 EST

Filed under: Car Buying, Chrysler, Ford, GM

Showing great discipline amid declining sales, the Detroit 3 have held back on the temptation to dump vehicles on fleet customers in order to boost numbers. As we reported last month, selling vehicles to corporate fleets and daily rental companies has been a long-practiced method to offload automobiles when sales slow down. Unfortunately, it also results in lowered residual values in the marketplace as these vehicles are dumped in quantity at auctions at the end of their service. Over the years, some models have even earned a "fleet" or "rental vehicle" stereotype, additionally damaging their public image, and sales, at the retail level. The Ford Taurus, for instance, was only sold to fleet customers during the last generation's final year of production, which may have further damaged the brand and affected sales of the renamed 2008 Taurus.

Even though the Detroit 3 are limiting fleet sales, it is still a large chunk of their business that accounts for nearly 35 percent of total U.S. sales for Ford and Chrysler. While fleet sales to Chrysler, GM, and Ford are down, other automakers are increasing their volume. It is reported that Toyota sold an additional 10,000 units to fleets during the first four months of 2008.

[Source: Automotive News - subs. req'd, Photo by Stan Honda, Getty Images]

Detroit 3 show restraint in tough times, continue to limit fleet sales originally appeared on Autoblog on Mon, 16 Jun 2008 15:30:00 EST. Please see our terms for use of feeds.

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GM to continue weaning itself off fleet sales

Michael Harley — Mon, 19 May 2008 18:02:00 EST

Filed under: Car Buying, Chrysler, Ford, GM

Even after posting a $3.25 billion loss, General Motors won't resort to fleet sales to ease their pain. In the automotive industry, fleet sales typically represent the lightly equipped, and heavily discounted, vehicles sold to rental companies or corporations. The numbers are significant, and fleets sales of a particular model may even exceed the volume sold at retail. Often laden with special financing incentives, the sales are less profitable for the automaker, and they hurt the used-vehicle market when a large number of the same model are dumped into the marketplace simultaneously.

Last year, GM sold about 700,000 units to fleet sales. In 2008, that number is projected to drop to about 575,000 units. By 2009, it will decline even further with a sales projection of just over 500,000 fleet units. GM isn't the only automaker following this path. Ford's sales to rental companies are down 16 percent from the same quarter last year. Chrysler LLC also curbed their sales, but they have declined to offer specifics. Automakers are also taking steps to increase used car values. Instead of selling "stripped" vehicles to rental fleets, the cars are equipped more with consumer-friendly options such as sunroofs and upgraded audio packages.

[Source: Automotive News, subs. req'd]

GM to continue weaning itself off fleet sales originally appeared on Autoblog on Mon, 19 May 2008 18:02:00 EST. Please see our terms for use of feeds.

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Ohio switching fleet to Ford Focus, gov't workers not amused

Chris Shunk — Fri, 25 Jan 2008 10:30:00 EST

Filed under: Coupe, Budget, Sedan, Government/Legal, Ford

click above for more pics of the 2008 Ford Focus SES Coupe

Fuel economy and CO2 emissions are on a lot of our minds right now, and many of us are re-examining our vehicle needs in an effort to save coin at the pump. The push to downsize has influenced the entire state of Ohio, which plans to switch its government fleet from 90-percent midsize sedans to one fortified with up to 50-percent of Ford Foci. Not only will the Focus save the state at the pump, but Ford's little economy car also costs less to buy. The Cleveland Plain Dealer, which calls the Focus "less stylish", pens the fleet cost of the Focus at about $12,000, while a Chevrolet Impala will run the state $16,000 or more. The switch to a Focus fleet will save the state $242,000 this year alone, and the dollar figures go up as more economy cars hit the fleet.

Of course some of the employees that have to drive the homely, yet practical, Focus are complaining about a lack of head and leg room. Unsympathetic DAS spokesman Ron Sylvester basically told complainers to shed some girth and deal with it. Who knows, maybe the state will use some of the savings to hook up its peeps with SYNC, which could give workers hands-free phone capabilities so they can complain about their car to friends while keeping both hands on the wheel. We're not so sure the rank and file will dislike the Focus though. We kinda liked it.

[Source: Cleveland Plain Dealer via The Truth About Cars]

Gallery: 2008 Ford Focus SES Coupe

Ohio switching fleet to Ford Focus, gov't workers not amused originally appeared on Autoblog on Fri, 25 Jan 2008 10:30:00 EST. Please see our terms for use of feeds.

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Chrysler to make cuts in fleet sales in '08

Damon Lavrinc — Sat, 05 Jan 2008 09:02:00 EST

Filed under: Chrysler

Chrysler has looked deep into it soul and decided to join the General and FoMoCo in an attempt to reduce its reliance on fleet sales. Chrysler's Vice Chairman, Jim Press (that still doesn't sound right), alluded to the reduction during a conference call regarding December sales figures and said, "you have to stay out of the 30-percent range and into the 20s." Where in "the 20s" was unspecified, but with vehicle sales expect to continue their decline this year, any reduction of income could hurt the automaker. However, Press went on to say that he expects a "very small increase" in retail sales during '08 and a plan is underway to increase the value-per-dollar quotient of Chrysler's brands by offering more features for less cash.

[Source: CNN Money]

Chrysler to make cuts in fleet sales in '08 originally appeared on Autoblog on Sat, 05 Jan 2008 09:02:00 EST. Please see our terms for use of feeds.

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Imports taking up the slack in fleet sales

Frank Filipponio — Mon, 23 Jul 2007 17:56:00 EST

Filed under: Etc.

OK, this seems like a no-brainer. As GM and Ford have gradually pulled back from the low-margin fleet sales market, import fleet sales have surged. After all, somebody has to keep the rental car lots filled. It's mostly been the mainline Asian automakers that have stepped in to fill the void. Toyota, Nissan, Mazda and Kia have all increased their corporate sales of cars and trucks, but they still remain bit players overall. About 11 percent of U.S. import brand sales are to fleets so far this year. That is up from just 8% last year. In comparison, the domestics sell 31 percent of their overall production to corporate customers. Although some fleet sales can be quite lucrative, the vast majority of rental car sales are end-of-year surplus that is heavily discounted to move.

[Source: Automotive News - sub. req.]

Imports taking up the slack in fleet sales originally appeared on Autoblog on Mon, 23 Jul 2007 17:56:00 EST. Please see our terms for use of feeds.

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What actually sells: Fleet sales for first half of 2007

John Neff — Fri, 06 Jul 2007 14:02:00 EST

Filed under: Car Buying, Earnings/Financials

Automakers often report their sales figures in whatever way makes them look most positive, and for a long time including fleet sales has been an effective way to make a slow selling vehicle look more popular with consumers on paper. Automakers don't distinguish between fleet and retail when reporting their sales, so we've been forced to believe them recently when we've been told that fleet sales are being reduced. General Motors, Ford and the Chrysler Group have all claimed that reducing fleet sales is a component of each company's respective turnaround plan, but we've found a document that suggests they're still way behind Toyota and Honda when it comes to resisting the easy route to higher sales.

These PDF documents from fleet-central.com, which we've converted to images and included below in a handy gallery, report in detail the percentage of sales sold to fleet operators in the first half of 2007. It's broken down by both vehicle segment and specific models, which allows us to pinpoint exactly which depend more on fleet sales than others.

Let's dive right in and pick out some of the more interesting numbers that you may be curious to know.

Subcompacts: (fleet) 149,766 | (retail) 825,697 | (total) 975,463 | (% fleet) 15.4%
Chevrolet Cobalt: 29,090 | 44,141 | 73,231 | 39.7%
Ford Focus: 19,660 | 54,621 | 74,281 | 26.5%
Toyota Corolla 22,999 | 121,348 | 144,347 | 15.9%
Honda Civic: 2,817 | 128,113 | 130,930 | 2.2%

VERDICT: Not surprising: While the Focus is older than the Cobalt, it enjoys a smaller percentage of fleet sales. The Corolla has a lot of fleet sales, but its retail sales are so large that its percentage of fleet sales is relatively small. The Civic's retail sales are higher than the Corolla's, however, which means that it is actually the real best-selling subcompact.

More segments after the jump! All the numbers can be viewed in the gallery below.

UPDATE: Fleet sales for trucks, minivans and SUVs added to the gallery.

[Source: fleet-central.com via AutoSpies]

Gallery: Fleet Sales - first half 2007

Continue reading What actually sells: Fleet sales for first half of 2007

What actually sells: Fleet sales for first half of 2007 originally appeared on Autoblog on Fri, 06 Jul 2007 14:02:00 EST. Please see our terms for use of feeds.

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Chrysler, Ford topping the list of fleet sales

Damon Lavrinc — Mon, 25 Jun 2007 09:56:00 EST

Filed under: Plants/Manufacturing, Chrysler, Ford, GM

For the domestic automakers, 2007 was supposed to be the year that they weaned themselves off the fleet sales teat. For GM, they've been doing pretty well, limiting their offloads of 10 or more vehicles to one company to around 24-percent of total sales. Chrysler and Ford, on the other hand, are still relying on the practice, coming in at 36-percent and 34-percent respectively - the highest of any automakers.

While this keeps overall sales up, it's a proven fact that it increases depreciation and limits profits.

Continue reading Chrysler, Ford topping the list of fleet sales

Chrysler, Ford topping the list of fleet sales originally appeared on Autoblog on Mon, 25 Jun 2007 09:56:00 EST. Please see our terms for use of feeds.

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Fleet sales also an issue abroad

Frank Filipponio — Thu, 12 Apr 2007 14:09:00 EST

Filed under: Europe, Audi, BMW, Ford, Mercedes-Benz, Volkswagen, Earnings/Financials

Now here's a story that won't take many Europeans by surprise. Just as GM, Chrysler and Ford get knocked for selling tons of vehicles to rental fleets in the States, BMW and Audi do basically the same thing in Europe. In fact, those two German firms lead the list of automakers who rely the most on fleet sales in their home market. This according to auto motor und sport magazine, which has reported that Audi and BMW "have the fewest private customers of all brands in Germany," with just 33.5% and 32.8% respectively. Mercedes was least likely to send a vehicle to Deutsch Hertz, with 50.1% going to private owners. VW rang in at 47.5%, Ford at 41%, and Opel tallied 39%.

To put those numbers in perspective, in the U.S., Ford sells about 66% of its vehicles now to private buyers, and 34% to fleets, which is almost the complete opposite of BMW and Audi in their home markets. Both Ford and General Motors, as well as the Chrysler Group to an extent, have managed to lower their fleet and rental sales in the first quarter of 2007.

Fleet sales take a toll on automakers because of the big discounts with which they're usually associated. The magazine says that the Focus typically sells to fleets at a discount of 28%! Passats (27%), Renault Lagunas (30+%) and Ford Mondeos (30+%) also go for a song. At 30% off those cars aren't making much if any money for the manufacturers. Essentially, they just keep the plants running, according to one sales director. It's hard to say why the percentage is so huge in Europe compared to US totals, but the fact that Americans have more vehicles per capita is probably one big factor.

[Source: just-auto, Blogging Stocks]

Fleet sales also an issue abroad originally appeared on Autoblog on Thu, 12 Apr 2007 14:09:00 EST. Please see our terms for use of feeds.

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Fleets inflating domestic minivan sales numbers

Alex Nunez — Tue, 02 Jan 2007 06:57:00 EST

Filed under: Detroit Auto Show, Trends, Minivan/Van, Chevrolet, Chrysler, Daimler, Ford, GM

In recent years, we know very few people with kids who have opted to buy domestic minivans as the primary family hauler. More often than not, we hear the Odyssey and Sienna names put forth, followed by an assortment of SUVs, domestic and otherwise. Some people have undoubtedly abandoned a domestic brand for one of the Japanese big guns. This isn't surprising, since the Odyssey and Sienna do the job very well.

Now comes word in Automotive News that fleet sales are keeping up the illusion that the domestics' position in this segment is merely calamitous and not utterly cataclysmic. Rick Kranz points out that from January through October '06, fleets accounted for 65-percent of Ford Freestar sales, 62-percent of Chevy Uplander sales, and over 40-percent of the DCX vans. And what of the Odyssey? Fleets account for 1 percent of sales. No wonder Ford and GM are all about the crossover nowadays. Their minivans are the stars in a Weekend at Bernies sequel in which they're playing the part of Bernie.

Ford's bailing out and pulling the ripcord labeled "FAIRLANE," while GM prepares its trio of new large crossovers -- the Saturn Outlook, GMC Acadia, and Buick Enclave -- with hopes for 130,000 in combined sales, according to North American sales veep Mark LaNeve. Chrysler, which as the inventor of the minivan has a lot of prestige on the line, will stay in the fight and unveil its fully redesigned vans at the Detroit show next week.

The overall market for minivans has been shrinking for several years in a row, and many of the automakers point to that as justification for looking to crossovers. We doubt that Honda and Toyota execs are fretting, however, since the (real) people buying minivans are apparently choosing theirs. Chrysler knows what it's doing here, so we hope to see something good next week. The market may be shrinking, but there is still a market for the things. It just takes a high-quality product to compete.

[Source: Automotive News - Sub. Req.]

Fleets inflating domestic minivan sales numbers originally appeared on Autoblog on Tue, 02 Jan 2007 06:57:00 EST. Please see our terms for use of feeds.

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Foreign manufacturers eclipse domestics in consumer sales

Damon Lavrinc — Tue, 25 Jul 2006 08:34:00 EST

Filed under: Etc., Japan, Chevrolet, Daimler, Dodge, Ford, GM, GMC, Honda, Hyundai, Nissan, Pontiac, Saturn, Toyota

Historically, U.S. automakers have held both the majority of fleet and consumer sales stateside. According to new research provided by R.L. Polk and Co. the "Big Two and a Half" only holds one of those distinctions for the first time in U.S. history.

Foreign car manufacturers now account for 53% of consumer car sales through May of this year and that figure only stands to increase as the year progresses. Honda, Nissan, Hyundai and, of course, Toyota held a slim margin under U.S. manufacturers this time last year with 49% of the retail market, but most analysts have predicted this day would come sooner, rather than later.

Industry observers maintain that GM, Ford, and Chrysler's slipping numbers are due in large part to high gas prices, forcing consumers to seek out smaller, more fuel efficient vehicles traditionally offered by Japanese manufacturers. Others note that many foreign automakers have a better grasp on what U.S. consumers desire in a vehicle, with safety features, interior amenities and resale value topping the most wanted list.

Some dire soul searching is in order if the domestics stand a chance at regaining their previously held title. Especially considering that fleet sales are likely the next to go to their competitors in the east.

[Source: Detroit News]

Foreign manufacturers eclipse domestics in consumer sales originally appeared on Autoblog on Tue, 25 Jul 2006 08:34:00 EST. Please see our terms for use of feeds.

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Hyundai and Kia to increase fleet sales

Joel Arellano — Wed, 22 Mar 2006 18:30:00 EST

Filed under: Trends, Europe, Marketing/Advertising, Hyundai, Kia, Earnings/Financials

It's no secret that the Korean automakers Hyundai and Kia Motors are on an aggressive schedule to be one of the top five automakers worldwide in the next few years. As one strategy to achieve that goal, they are increasing their fleet sales in Europe.

According to Gerry Dorizas, vice president of Hyundai Motor Europe: "It is a major part of our strategy. To eventually develop in Europe, we see fleet as a big slice of the market."

Fleet vehicles, such as car rentals, account for roughly thirty-seven percent of the European vehicle market. Both Hyundai and Kia want to double their current numbers of units sold this year by 2009.

The move stands in stark contrast to American automakers, who have been moving away from fleet sales in order to improve brand image and resale value.

Full details and figures at the link.

[Source: Automotive News]

Hyundai and Kia to increase fleet sales originally appeared on Autoblog on Wed, 22 Mar 2006 18:30:00 EST. Please see our terms for use of feeds.

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